'Pragmatic' discussions required as Birmingham City Council unveils plans for £300m budget cuts

Birmingham City Council has announced huge planned cuts in its latest budget

A huge raft of cuts has been announced by Birmingham City Council as it unveils its latest budget – something requiring “pragmatic and open discussion”, according to one business leader.

Europe’s largest local authority says it is aiming to save around £150 million in 2024/25 and the same figure again the following year.

Among the proposals which could impact the business community are a reduction in cultural grants and trading standards and a move to bring in-house enforcement work for some council tax, business rates and business improvement district bids.

The council’s place, prosperity and sustainability team is also facing total savings of £8.36 million this coming year, including a redesign of the whole directorate and making business enterprise teams self-funding.

It is also proposing to close its offices in Woodcock Street, Sutton New Road and New Aston House to save money, bringing more commercial stock to the market, while council tax will rise for residents by 9.99 per cent both this year and next.

Click through here to see more detail on the council’s proposed savings and also the latest reaction on BirminghamLive’s blog.

The budget news is the latest twist in the long-running problems facing the council after it issued a Section 114 notice last year, effectively declaring itself bankrupt.

It is dealing with an ongoing equal pay claim and overspend on an new IT system while it has also emerged it is now inviting bids for plots at its new housing estate in Perry Barr.

The complex was initially meant to be accommodating athletes and officials during the 2022 Commonwealth Games but the pandemic meant it could not be completed in time.

Council leader Cllr John Cotton said the authority was facing a number of financial challenges and apologised “unreservedly” for the spending reductions and council tax increase.

“We have no alternative than to face these challenges head on and we will do whatever is necessary to put the council back on a sound financial footing,” he added.

“Our situation has been made much worse by a national crisis in local government finance.

“A combination of austerity and underfunding – Birmingham has lost over £1 billion in funding since 2011 – added to a rising demand for services and inflation mean that across the country local authorities are facing some of the biggest budget challenges in living memory.”

Greater Birmingham Chambers of Commerce said it was hoping to secure talks with the authority in a bid to understand the impact of the cuts.

Chief executive Henrietta Brealey said: “We are continuing to work through the implications for the business community.

“While Birmingham continues to be a vibrant place to live, work, start and grow an enterprise, local authorities are important stakeholders in making our cities great places to do business.

“That includes ensuring support for the most vulnerable in society. The significant financial strain Birmingham City Council is facing is well known.

“What’s critical now is a pragmatic and open discussion about the impact these cuts will have and what can be done to best mitigate the most challenging of them.”

Trade union GMB has called for an intervention by central Government as its members working at the council engage in a ballot over strike action related to the equal pay claim.

Union organiser Racheal Fagan said: “Birmingham City Council seems to have a plan for slashing local services but they don’t yet have a plan for settling equal pay.

“We need to see urgent central Government intervention on the equal pay crisis but instead they’re trying to pass the cost onto ordinary Brummies.

“The UK Government has continually dismissed this as a local issue for Birmingham but, with more councils across the country facing the crisis of rising equal pay debts and shrinking budgets, that position just isn’t sustainable.

“Without central government intervention, the disastrous budget inflicted on our city could become a tragically familiar story across the country, with ordinary people paying the price for political failures.”

Lyle Bignon, an ambassador for the Night Time Industries Association in Birmingham, said: “The proposed cuts to council culture budgets confirm what many of us working in arts, culture, entertainment, music and the night-time economy in Birmingham have known for some time.

“Our city’s council, regional authorities and key agencies have simply not placed enough value on culture over the years, despite its proven social and economic benefits.

“The announcements sound a major alarm for Birmingham’s creative community as well as cultural professionals and audiences across the UK.

“Birmingham culture will thrive despite these enormous setbacks, however, a large proportion of responsibility for any future cultural deprivation within the city’s communities must be laid squarely at the door of previous council leaders and their administrations.”